Operations modelling on a micro scale

The Brief

Modelling and Analysis

Working backwards from the customer service objectives, we modelled
the microscopic detail of batch size, amount of labour day by day,
number of changeovers, average size of run and so on.

The Results

True 'assemble on the fly' would have been a step too far for the
organisation at that stage in its development. Given their history,
'lot size one' and 'zero changeover time/cost' were not on the immediate
horizon.

We needed to step towards those objectives, perhaps never reaching them.

We designed a 'push/pull' system, which still met the customer needs
but insulated assembly - which is very labour intensive - from the
worst peaks and troughs of direct linking to demand.

We showed how they could use the order processing time to reduce
fluctuations in daily man hours to a manageable ~15%.

We called this time 'virtual stock', and showed that 5 days 'stock'
could be 3 days physical stock plus 2 days of virtual stock.

We designed the new on-site warehouse to cope with the immediate
challenge, and the likely 5 year scenario once customers had regained
faith in the factory's ability to supply.

We anticipated and modelled a continual increase in product variety,
and sized the warehouse to cope.

We designed all the process controls, including specifying the IT
changes to support virtual stock.

Unusually, we advised that the warehouse should not have a locator
system. With only ~300 products, and true real time 'assemble to
ship', the operators could remember what lay where without waiting
for the putaways to be keyed.

The Outcome

Direct shipment started on the target day. Customers expressed delight,
and the process of rebuilding confidence in the ability to supply
is well underway. After a slow start, the pickers can find the stock.
The (tiny) finished goods warehouse proved large enough. Total finished
stock has dropped, despite the change from to order to ex-stock.
The IT changes had not been completed at the time of writing.